Total revenues for the fourth quarter of 2013 were $12.1 million, an
increase of 36% compared to $8.9 million for the fourth quarter of 2012.
Royalty and license revenues of $11.6 million for the fourth quarter of
2013 were up 52% from the same period last year.

Net income for the fourth quarter of 2013 was $37.4 million, or $1.26
per diluted common share, compared to a net loss of $(402,000), or
$(0.01) per share, for the fourth quarter of 2012. Net income for the
fourth quarter of 2013 included an income tax benefit of $36.8 million,
or $1.24 per diluted common share, resulting primarily from the release
of a tax valuation allowance relating to net deferred tax assets. In
addition, these results reflect the impact of a change in accounting
method we adopted in the fourth quarter of 2013, pursuant to which we
now expense external legal fees incurred in applying for patents and
maintaining our IP portfolio in the period incurred, rather than
capitalizing them and then amortizing them over time.

Adjusted EBITDA for the fourth quarter of 2013 was $2.0 million,
compared to $610,000 in the fourth quarter of 2012, in each case
reflecting the change in accounting method.

Results for the twelve months ended December 31, 2013

Revenues for fiscal 2013 were $47.5 million, an increase of 48% as
compared to $32.2 million for fiscal 2012. Royalty and license revenue
for fiscal 2013 totaled $46.2 million, an increase of 59% over $29.0
million for fiscal 2012.

Net income for fiscal 2013 was $40.2 million, or $1.37 per diluted
common share, as compared to a net loss of $(7.2) million, or $(0.26)
per share, for fiscal 2012, in each case reflecting the change in
accounting method. Net income for 2013 included an income tax benefit of
$36.5 million, or $1.24 per diluted common share, resulting primarily
from the release of a tax valuation allowance relating to net deferred
tax assets.

Adjusted EBITDA for fiscal 2013 was $8.9 million, compared to a loss of
$(2.9) million in fiscal 2012, in each case reflecting the change in
accounting method.

As of December 31, 2013, Immersion’s cash, cash equivalents, and
short-term investments were $71.1 million, compared to $43.5 million as
of December 31, 2012.

Management Commentary

“2013 was a breakthrough year for Immersion as we delivered record
revenues within the upper end of our guidance range. Excluding the
impact of a change in accounting method adopted in the fourth quarter,
Adjusted EBITDA for 2013 was also within our guidance range,” said Vic
Viegas, chief executive officer of Immersion. “During the year,
Immersion successfully executed our Basic Haptics licensing strategy and
saw the continued success of products in the market using Immersion
TouchSense software. We made strong progress in further validating the
importance of haptics in our key mobile, gaming and automotive verticals
as well as expanding the market for our technology in evolving
categories such as wearables. In addition, we began to lay the
foundation to capitalize on longer-term growth opportunities in the area
of mobile content, which is a natural fit for our solutions.”

Business Outlook

"We are extremely confident in the prospects for our business in 2014
and beyond and believe that we have the right combination of talent,
resources and targeted investments in place to continue a trajectory of
strong profitable growth. Based on our current outlook, we expect
revenues for 2014 to be in the range of $54 million to $62 million,
reflecting growth of 14% to 31% over the prior year, which included a
one-time benefit of more than $2.0 million related to a contract renewal
transition, and we expect Non-GAAP Net Income for 2014 to be in the
range of $8 million to $15 million, which results in Non-GAAP earnings
per share of $0.27 to $0.50, assuming 30 million shares outstanding,”
concluded Mr. Viegas.

Business Highlights

During the fourth quarter, Immersion made notable progress within key
verticals and continued to lay the foundation to capitalize on strategic
opportunities, including:

Appointing Jason Patton to the new role of Vice President and General
Manager of Content & Media. Patton will spearhead business development
and operational execution for the company’s mobile ads and
entertainment initiative.

Establishing a regional headquarters in Shanghai to further expand its
sales and technical teams to support mobile OEMs in the region.